Global Coffee Supply Surge Continues to Weigh on Both Arabica and Robusta Markets

Supply Projections Paint Picture of Ample Availability

The coffee market faces mounting pressure from ample global supply projections for the 2025/26 season. The USDA’s Foreign Agriculture Service forecasted on June 25 that world coffee production will reach a record 178.68 million bags, representing a +2.5% year-over-year increase. While arabica production is expected to decline -1.7% to 97.022 million bags, robusta output is projected to surge +7.9% to 81.658 million bags, indicating a significant shift in supply dynamics favoring the lower-grade variety.

Brazil’s coffee harvest expansion remains a key factor driving ample supply expectations. Conab, Brazil’s crop forecasting agency, raised its 2025 production estimate by 2.4% to 56.54 million bags on December 4, up from the September projection of 55.20 million bags. Recent favorable weather patterns have reinforced these bullish production outlooks. Somar Meteorologia reported that Minas Gerais, Brazil’s largest arabica-growing region, received 79.8 mm of rain during the week ended December 12—155% of the historical average. Climatempo indicated Monday that “intense and persistent rainfall” is expected to continue this week across Brazil’s coffee zones.

Vietnam’s Production Surge Pressures Robusta Prices

Vietnam’s coffee sector is another major contributor to ample global supplies. The nation’s 2025/26 coffee output is projected to climb +6% year-over-year to 1.76 million metric tons, or 29.4 million bags—a four-year high. The Vietnam Coffee and Cocoa Association stated on October 24 that output could reach 10% above the previous crop year if weather conditions remain favorable. November export data underscored this abundance: Vietnam’s National Statistics Office reported that November coffee exports jumped +39% year-over-year to 88,000 MT, with January-November exports rising +14.8% year-over-year to 1.398 million metric tons.

Price Declines Extend as Market Absorbs Supply Outlook

The ample supply picture has triggered significant downward pressure on both coffee varieties. March arabica coffee (KCH26) closed down 8.20 points (-2.28%) on Tuesday, while January ICE robusta coffee (RMF26) fell 107 points (-2.65%). These declines extended a two-week downturn, with arabica reaching a three-week low and robusta sliding to a four-month low as traders absorbed the implications of abundant future supplies.

Arabica futures have found modest support from recent export constraints. Brazil’s November green coffee exports fell -27% year-over-year to 3.3 million bags, according to exporter group Cecafe on last Wednesday. Additionally, US purchases of Brazilian coffee from August through October plummeted 52% from the same period last year to 983,970 bags, reflecting the impact of previous tariffs on American imports from Brazil, though those duties have since been reduced.

Inventory Movements Signal Mixed Signals

ICE-monitored arabica inventories hit a 1.75-year low of 398,645 bags on November 20 before recovering to a five-week high of 426,523 bags by December 5. ICE robusta stocks fell to an 11.5-month low of 4,012 lots last Wednesday, suggesting that while inventories remain constrained in certain categories, they lack sufficient tightness to counter the bearish influence of ample supply forecasts.

Global coffee exports through the current marketing year (October-September) have shown signs of contraction. The International Coffee Organization reported on November 7 that global coffee exports declined 0.3% year-over-year to 138.658 million bags, a minor decrease that underscores slowing demand relative to ample production expectations. The USDA further projects that 2025/26 ending stocks will climb +4.9% to 22.819 million bags from 21.752 million bags in 2024/25, reinforcing the structural oversupply narrative weighing on prices.